Digital AdsRecently I’ve noticed that reading news or other articles on my phone may no longer be an option for me. The reason? I now spend most of my time disabling digital ads that pop up on top of the article, scroll with my screen, crawl along the bottom, or play mysteriously in the background. Here’s the rub, I’m so busy trying to disable the barrage of ads that I don’t even notice what they are for. Like most people, I accepted a few ads as part of a free reading experience, but have we gone too far? And does it work anymore?

 

What We Are Spending?

Worldwide spending on digital advertising crossed $137.5 billion in 2014. FMCG giant, Unilever increased its digital advertising budget by 40 percent in 2014. In 2013, Procter and Gamble spent more than a third of its advertising budget on digital advertising. One thing is for sure: digital advertising is growing by leaps and bounds. But the average click-through-rate (CTR) for an ad is just 0.1%. Reportedly, half of those clicks are accidental, and according to comScore.com, 54 percent of display ads are not even seen.

 

What Are The Returns?

There is an indication that digital ads can deliver some positive effect. A Nielsen study found that running targeted online advertisements (assisted by purchaser data) can triple your ROI. Another study by Datalogix in partnership with Facebook, found that even though most Facebook ads did not receive clicks, 99 percent of offline purchases were influenced by Facebook ads even if the user did not click on the ads. Both Facebook and Datalogix have interests in the study, so let’s not do a victory dance yet. The results of the study were not verified by a third party. A separate eBay study concluded that in most cases, people who saw ads would have bought the product anyway whether the ad was placed there or not.

 

So How Do You Make Digital Advertising Effective?

Digital advertising isn’t a “thing of the past”. Nor is it something to avoid, depending on your budget and your mission. Here are some things to consider as you plan your digital marketing strategy:

  • Don’t blast the world with your message. In this crowded market, finding your niche is key, and you can target people today in ways never before imagined.
  • When geography is an important part of your demographic, consider geo-fencing. With geo-fencing, you can target a radius in a specific area to deliver your message to those who need it most.
  • If you have video, consider using pre-roll. Pre-roll runs before a video but remember that in most cases people can skip it after 5-seconds. Non-skippable plans are available.
  • If you are a large, well-known company and people already know your product or service, digital may not work as well for you. The same eBay survey mentioned above noted digital ads work best when people didn’t know before that a particular company is offering a certain product. (This is not to say large companies should not have a top-of-mind campaign running at all times.)
  • Use search re-targeting so that your ad follows the people who looked into a similar service as yours. While they may have already been shopping for it, re-targeted ads serve as a constant reminder that now it’s time to buy.

 

Our Real World Example

In our experience, the tactics listed above are sound. We’ve been working with a local nonprofit in Montgomery, Alabama to educate the community about free health resources available to them. We included digital ads in their marketing mix primarily because the target market was digitally engaged. Using targeted ads and geo-fencing, their click-through-rates were up to %1500 over the national average for similar companies. If you take half of those clicks away as accidents, it’s still a clear communications win.

So what’s the takeaway? Well, maybe I’m no longer content with spending more time disabling ads than reading articles on my phone, but most people clearly don’t share my concern, and that’s great because it means there is still plenty of value in digital advertising.

While I’m happy to conclude this article with a resounding “YES!” to digital advertising, I admit sometimes I still like a good ole’ piece of direct mail.